- Urge CBN’s MPC to halt further rate hike
An economist, Paul Alaje, has noted that the rebased inflation by the National Bureau of Statistics is good for investors’ confidence but has not changed the economic realities, including high food prices that Nigerians grapple with.
“Before this announcement, food inflation alone was about 51.8%, but in this new figure, food inflation of the total inflation now accounts for only 40%,” he said on a live television programme.
“That does not mean that if you go to the market tomorrow that the price of food has improved, that will be a lie, our reality remains the same.
“Also, people who want to invest in our country, perhaps when they see a reduced inflation rate, will have confidence, and we need this,” he added.
On Tuesday, the Bureau rebased the Consumer Price Index, which measures the rate of change in prices of goods and services. By rebasing the CPI, the Bureau updated the reference year used to gauge price levels from 2009 to 2024.
By implication, the NBS said Nigeria’s headline inflation changed from 34.80% recorded in December 2024 to 24.48% in January 2025.
Alaje said, “It will be wrong for people to say inflation dropped from 34 to 24%. That will be a wrong narrative. If it drops, we should see the reflection in prices, but that is not what we have seen.”
The economist said the right word to use is ‘change’ and not ‘drop’.
“What the Bureau of Statistics has done today is not to say that inflation dropped. The Bureau is saying: ‘we are no longer going to reference 2009 as the base year; we will now start to reference 2024’,” he said.
Alaje said, in 2009, Nigeria used 20 hours per week as an employment measure, but now the country uses one hour per week as a gauge for employment.
He cited two key decisions of the government – subsidy removal and floatation of the forex rates and noted that “the wisest thing to do is to make the necessary adjustment”.
During his 2025 budget presentation last December, President Bola Tinubu expressed optimism that Nigeria’s inflation rate would decline from to 15% in 2025 but economists like Alaje and Bismarck Rewane termed the president’s goal as aspirational and unrealistic.
Experts urge CBN’s MPC to halt further rate hike
In the same vein, a financial expert and President of the Capital Market Academics of Nigeria, Prof. Uche Uwaleke, has urged the Monetary Policy Committee of the Central Bank of Nigeria to pause interest rate hikes to create room for output growth following the rebasing of the Consumer Price Index which measures inflation by the National Bureau of Statistics.
The NBS has just released the rebased CPI, reflecting an updated price reference period (base year) of 2024 and weight reference period of 2023.
According to the rebased figures, Nigeria’s inflation rate for January 2024 stood at 24.48 per cent year-on-year (Y-o-y), with Food Inflation rate standing at 26.08 per cent, Core Inflation rate at 22.59 per cent, Urban Inflation rate at 26.09 per cent, and Rural Inflation rate at 22.15 per cent.
Reacting to the rebasing, Uwaleke, a former Commissioner for Finance in Imo State and Director, Institute of Capital Market Studies, Nasarawa State University, said that the exercise was primarily meant to reflect current inflationary pressure which explained why the NBS moved the reference price period to 2024.
Against this backdrop, he said the development was welcome.
“The benefits of the rebased number are several. First, it will help the government, especially the monetary authority, to make more informed decisions.
“It makes our inflation number comparable with the rest of the world since it is based on standard and updated methodology.
“This can place both foreign and domestic investors in a stronger position to make investment decisions in favour of Nigeria
“Now that the inflation number for January has provided evidence of weakening inflationary pressure, I expect the Monetary Policy Committee of the CBN to pause rate hikes to create room for output growth,” he said.
